Essay Questions
- Analyze the author’s argument that the supposed dilemma between “internal monetary stability” (stable prices) and “external monetary stability” (stable exchanges) is “more apparent than real.” How does this critique support the broader case for monetary internationalism?
- Discuss the author’s critique of “inductive” theories connecting gold supply and price movements. Elaborate on the specific methodological and conceptual flaws identified in the work of Professors Cassel and Rist, and explain why the author concludes these inquiries do not add much to our knowledge.
- The author concludes that “The process of re-equilibrium is essentially the same for all monetary systems.” Elaborate on this thesis by comparing and contrasting how adjustments in the balance of payments are achieved under a system of fixed parities (like the gold standard) versus a system of flexible exchanges.
- Drawing on the text, define monetary internationalism and its necessary conditions. Explain how the international gold standard, when functioning properly, provides the “best practical approximation to a world currency” and fulfills the requirements of internationalism. Contrast this with the consequences of economic nationalism.
- Trace the “internal logic” of exchange control as described in the source. Explain why it is presented as an inevitable consequence of combining economic nationalism with a desire for exchange stability, and discuss its ultimate implications for a nation’s trade, currency, and political system.